Is Buying The Scottish Investment Trust PLC (LON:SCIN) For Its Upcoming £0.2 Dividend A Good Choice?
Investors who want to cash in on The Scottish Investment Trust PLC’s (LSE:SCIN) upcoming dividend of £0.2 per share have only 8 days left to buy the shares before its ex-dividend date, 11 January 2018, in time for dividends payable on the 09 February 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Scottish Investment Trust’s latest financial data to analyse its dividend attributes. See our latest analysis for Scottish Investment Trust
How I analyze a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
Is their annual yield among the top 25% of dividend payers?
Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
Has dividend per share risen in the past couple of years?
Does earnings amply cover its dividend payments?
Will it have the ability to keep paying its dividends going forward?
How well does Scottish Investment Trust fit our criteria?
The company currently pays out 26.48% of its earnings as a dividend, which means that the dividend is covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Shareholders would have seen a few years of reduced payments in this time. Relative to peers, Scottish Investment Trust has a yield of 2.86%, which is high for capital markets stocks but still below the market’s top dividend payers.
What this means for you:
Are you a shareholder? Whilst there are few things you may like about Scottish Investment Trust from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor. It may be beneficial exploring other income stocks as alternatives to Scottish Investment Trust or even look at high-growth stocks to supplement your steady income stocks. I encourage you to continue your research by taking a look at my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.
Are you a potential investor? If you are building an income portfolio, then Scottish Investment Trust is a complicated choice since it has some positive aspects as well as negative ones. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. As with all investments, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. Check our latest free fundmental analysis to explore other aspects of Scottish Investment Trust.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
